When cryptocurrencies replace fiat
According to the author of the report, Jim Reid, due to consumer demand for dematerialized means of payment and anonymity, by 2030, digital money can replace fiat money.
According to Reid, the massive introduction of cryptocurrency will have a number of obstacles. The expert called the legalization of digital money by the government of the countries the first of them. According to Reid, this problem can be solved if crypto projects are to enter into partnerships with large companies.
Thus, virtual currencies will begin to appear in the mass market through, for example, mobile applications. Reid also noted the dependence of the crypto industry on electricity. As cryptocurrencies spread, mining will grow in popularity.
Since countries have different conditions and prices for electricity, the adoption of virtual currencies will slow down. Another obstacle, according to Reid, is the vulnerability of cryptocurrencies to cyber attacks. He suggests that states will not legalize digital assets as long as they pose a threat to the financial system.
This was one of the reasons why the European Union banned the use of stablecoins on its territory. Recall the finance ministers of the EU countries said:
“Not a single agreement on the launch of stablecoins will come into force until the regulatory, legal and regulatory risks are identified and eliminated.”
At the same time, European regulators are exploring the possibility of creating special rules for regulating crypto assets and stablecoins.
According to the representative of the European Commission Valdis Dombrovkis, they are now preparing the relevant regulations to include this issue on the agenda. Ministers also supported the ECB’s plans to develop its own digital currency, which aims to become an alternative to private crypto assets.
Benua Kere, a member of the board of the European Central Bank, also spoke about replacing traditional money with virtual. According to him, cash is rapidly losing popularity, and the launch of the European Union’s unified digital system, scheduled for the end of 2021, will help solve the problem.